Gold trading began to show a recovery at the close of last week following the US dollar's depreciation reaction after the latest NFP employment report was published.
With the reading for July declining, the US dollar experienced a significant depreciation in value, while demand for gold increased again due to the current political instability in the United States (US).
President Donald Trump has fired officials from the Bureau of Labor Statistics Commission after being disappointed with the NFP report, while Federal Reserve (Fed) governor Adriana Kugler has also reportedly resigned early before her term ends.
Examining the XAU/USD chart which measures the value of gold against the US dollar, the price has reached the 3270.00 level before a strong increase was displayed at the close of last week.
Passing the 3300.00 level, the gold price continued to rise until the end of the last session reaching a high of around 3360.00.
Although gold prices have been flat around last week's closing levels for the first few sessions this week, investors have seen signs of a trend change after the price rose above the Moving Average 50 (MA50) support line.
If the rise continues, gold prices will reach back to the 3400.00 level before heading towards the highs reached last July near 3440.00.
However, if prices retreat back below 3300.00, gold is likely to be at risk of falling lower again.
Exceeding last week's levels, gold prices will record a 12-week low with a target for a lower decline towards around 3200.00.
